Tag: Subsidies

(We all seriously hope Najib has a concrete financial plan for the country when it comes to empowerment of its people and the economy and not doing for the sake of his own political survival in the upcoming political party elections. As taxpayers, no one want to see their hard earned money down the toilet on short-sighted financial plans. Image source: http://www.antaranews.com)

Sorry for starting with something “international” this week – Malaysia’s political circus show hardly makes a dent on the front pages at where I am in now.

As you may be aware, President Obama and most of the western world have put the blame squarely on the Syrian Government on the recent chemical attacks. David Cameron tried to get the UK Parliament to pass a motion on Syria and failed. And despite that and rather strong opposition from the US Senate, the Obama Administration seemed bent on punishing the Syrian Government for the alleged chemical attacks on its own people (how they effectively going to do it another question). That is until Russia came up with an alternate solution and provided a way out for Obama from a rather sticky situation. The Obama’s proposed shot over the bow is really not effective unless there are troops on ground – something the American public is well aware of and do not want to do after the same blunders in Iraq and Afghanistan.

Then this came up:-

Syrian rebels in the Damascus suburb of Ghouta have admitted to Associated Press correspondent Dale Gavlak that they were responsible for last week’s chemical weapons incident which western powers have blamed on Bashar Al-Assad’s forces, revealing that the casualties were the result of an accident caused by rebels mishandling chemical weapons provided to them by Saudi Arabia.

Rebels told Gavlak that they were not properly trained on how to handle the chemical weapons or even told what they were. It appears as though the weapons were initially supposed to be given to the Al-Qaeda offshoot Jabhat al-Nusra. According to Abdel-Moneim, the weapons exploded inside a tunnel, killing 12 rebels.

If accurate, this story could completely derail the United States’ rush to attack Syria which has been founded on the “undeniable” justification that Assad was behind the chemical weapons attack. Dale Gavlak’s credibility is very impressive. He has been a Middle East correspondent for the Associated Press for two decades and has also worked for National Public Radio (NPR) and written articles for BBC News.

Saudi Arabia’s alleged role in providing rebels, whom they have vehemently backed at every turn, with chemical weapons, is no surprise given the revelations earlier this week that the Saudis threatened Russia with terror attacks at next year’s Winter Olympics in Sochi unless they abandoned support for the Syrian President.

Well, this piece of news may just be a part of an elaborate spin to turn the public opinion against Obama’s stand on the Syrian conflict. But then again, what if it is true? Let’s just hope that this does not escalate into something bigger and cause the world oil price to spike again. It is just the excuse for the “you know who” to reduce the subsidy and take the amount saved into another wasteful adventure. And speaking of “you know who”, it was not a big surprise when Najib, after increasing the petrol price recently, turns around and announces this:-

Datuk Seri Najib Tun Razak announced a massive economic empowerment agenda for bumiputras while thanking the community for their strong support for Barisan Nasional in the 13th general election.

The Prime Minister said: “Based on the support of the Malays and other bumiputras in the 13th general election, the Government has decided to take a quantum leap to implement concrete and thorough strategies and approaches. We call this bumiputra economic empowerment, and it is to safeguard the community now and forever.”

Be mindful that Najib is not talking about small fry money here. And it is good that the Government is looking into ways to “empower” the community (which it claims to be still weak and in need of Government help since 1969). The question is will the community get the necessary funding and help lock, stock and barrel or will it trickle down after the various fat cat middlemen, cronies and corrupt politicians have put their dirty hands in it? And what happened to all policies and money that was poured to “empower” the community in the past – money that belonged to taxpayers from various race, culture and religion? Has it gone down the drain or has it quietly went into the pockets of cronies and corrupt politician?

The BN may have announced a series of new race-based measures to boost the economic situation of the bumiputeras, but who is to be blamed for the community falling behind even after almost a half-century of affirmative action?

It is time to ask the same question as it seem to be the same thing all over again. The PM had announced the same race based policies before and under the same whistles and bells and in the same name of championing the community but after sometime, nothing much changes and before you know it, the PM announces another race based policies and the vicious cycle starts all over again. The Government says subsidy is bad but throwing taxpayers’ money on the same failed formula and getting no positive result is worse. The BN Government have been recycling the same old policies and re-branding them with new names but be rest assured, it only fattens the already fat lazy cats.

Can you think you can trust the politicians to keep to their words this time around and whatever “empowerment” that should happen do happens? Yes? Well, think again.

(It does not matter whether it is from Barisan or from Pakatan – it is unfortunate that we still have budget deficits by the billions. Why it is so? Is it because we are biting more than we can chew? We been spending more than what is in our pockets? The real challenge for a good Government would be to balance the income with the expenses and reduce the deficits to a zero. Image source: Malaysian Insider)

If you have read the news last week or so (in between the on-going police investigations on the death of young William and the recent Thaipusam), you probably would have read this:-

The Government has approved a RM50mil allocation to the Women, Family and Community Development Ministry for the Hati Rakyat (People’s Heart) programme beginning next month. Prime Minister Datuk Seri Najib Tun Razak said the funds were to assist single mothers, those with special needs and senior citizens.

Najib said that the funds could be used to provide training for senior citizens or buying adult diapers or wheel chairs. The programme would be combined with the 1Azam programme that enables the poor to do small business, he said, adding that he hoped the funds would reach the expected target groups.

Deputy Prime Minister Tan Sri Muhyiddin Mohd Yassin today ticked off the opposition’s defacto leader Datuk Seri Anwar Ibrahim for alleging that the country was on the verge of bankruptcy.

“We are in fact flushed with funds. Last year for example the Inland Revenue Board managed to collect RM125 billion as income for the country. This has never been done before. “We are thus in a very strong financial position. We also manage our finances very well. None of our civil servants have yet been denied their salary,” he said when addressing over 5,000 people at a meet-the-people session held at the Civic Centre, here, today.

Muhyiddin said no Malaysian had died of starvation but rather obesity is the norm because of too much good food available, so much so that it has turned into a major problem among students in schools nationwide. He said at the national level, poverty rate was only three per cent while in Sarawak it stands at only four to five per cent.

Muhyiddin said the BN government would continue with the agenda of helping the people and ensuring the country becomes prosperous, united and stable with the support of the people, regardless of race or religion. “The general election is the best opportunity for the people to say they want it to continue and to achieve more.

“The choice is in your hands. Please once again give your full mandate to BN under the leadership of Prime Minister Datuk Seri Najib Abdul Razak,” he said.

If you can read in between the lines, that is a BN politician talking to you with your own money in his hands and saying that he will give you this money if you vote them lot into power again. But given the fact that this has been going on for some long donkey years and no one in the authority sees this as an implicit way to buy votes, it is alright– throwing money to buy votes to help the poor people is expected to happen on a more regular basis as we move nearer to the general elections.

But the thing is ask yourself, whether it worth for the Government with not-so-deep pockets to spend millions of ringgit on short term plans rather than on a long term one. Take for examples of the BR1M 1.0 and 2.0 and other “dumbest of the dumb” ideas like throwing money to youth to buy smartphones:-

For the hard-core poor, RM500 is indeed a large sum that will go a long way to reduce their financial burden. It may even feed them and their family for a month. To the large majority of other recipients the sum, as a one off payment, is just an additional bonus and does not significantly help them out financially.

In fact many use it to spend it on items that they really don’t need. The amount that runs into tens or even hundreds of millions is hard earned taxpayer’s money which could be used more beneficially for the people than be given out freely to “enjoy” themselves for a few days.

What the people really need is not a one-off payment during election time but a better planned scheme to help them in the long term to cope with the difficult times ahead. They need to be given the opportunities to acquire the skills and knowledge to improve themselves.

They need more job opportunities and better wages, easier accessibility to quality and cheaper health care, better and more affordable tertiary education and more affordable housing especially in urban areas. They need a better, cheaper, more convenient and safer transportation system. Most of all they need a system that recognises them as legitimate citizens whose constitutional rights are safeguarded regardless of race or creed.

The present practice of giving out money on and off, as carried out now, is an election gimmick that capitalises on the people’s inherent “greed for free money”, which is becoming a prevalent culture today. It should be strongly discouraged as it is a form of corruption, which should not be tolerated by the people.

And there is a big question of whether the Government is indeed flushing with money and can afford to make these one-off payments now and then without bleeding the limited funds available for other more important sector of the economy?

But there is a difference. A big one. Selangor and Penang, both Pakatan-led states that provide financial aid for senior citizens, children and the disabled, have far surpassed their predecessors’ financial performance. Selangor increased its cash reserves to RM1.9 billion in 2011, its highest in 28 years while Penang successfully reduced its state debt by 95% from RM600 million to RM35 million in the same year.

This is not the case for the federal government, which has run a fiscal deficit since 1997. Although it has fallen slightly from its 22-year high of 7% in 2009 to 4.5% in 2012, our fiscal records aren’t very stellar. Our debt to GDP ratio is at 53%, just below the statutory limit of 55%.

Both BR1M packages will cost the government an estimated RM2.6 billion and RM3 billion respectively. Najib stated that because the economy continues to expand, this results in increased tax collection and therefore the reason for which BR1M can be dished out.

In reality, a huge RM13.8 billion supplementary budget was tabled in June 2012, forming almost 5% of the original budget. Out of this, RM7.5 billion was for cash aid and oil and gas subsidies.

And especially when the source of income is limited to taxpayer’s money and of course the golden money from stated owned Petronas:-

The primary problem is one of numbers. In a global policy environment rightly wary of ballooning budget deficits, the fact that the Malaysian government has been in DEFICIT EVERY YEAR since the introduction of the NEP in 1971 (except for a period from 1993 to 1998) is troubling. This is particularly the case since Kuala Lumpur spends much less on social services than do Western governments.

The economic numbers look even more troubling when one considers that around 40 percent of the government’s revenue comes from the state-owned oil and gas giant Petronas.

So until the general election passes over and BN regains a sizeable of the votes that they lost in the last general election, do expect more generous gifts from the politicians. But beware of the Pakatan fellows as well who promises a subsidy laden Government if they are chosen. Be mindful to vote for those who work on a long term plan for the people instead of one-off payments to satisfy the masses for quick gains for the next elections.

It certainly looks like a highway robbery than a sincere promise to maintain the highway toll rates

(We are ok with highways and highway toll booths but we are pissed off with the one sided agreement and the huge compensation being paid from the tax payers’ pockets. Image source: http://travelerfolio.com)

During the recent Budget 2011, Najib made this bold statement that the toll rates on four highways owned by PLUS Expressways Berhad (other highway operators, apa macam?) will not be raised for the next five years as a means of alleviating the burden of highway users. For those who have been keeping their heads in the ground, this may sound like a sincere, heavenly promise by politicians who are concerned with the rakyat’s plights. But for the rest of us, we all know that when certain things promised by the politicians seem to be too good to be true, there is always a catch to the deal.

What Compensations?

No one seems to ask the question – what happens to the toll amount that is supposed to be increased by PLUS? Surely PLUS as a business entity is unlikely to give such huge discount (even if it has all the MPs in the Parliament at the top of their voice, protesting for any toll hike) or ignore what is entitled under the agreement. It does not make good business sense and certainly PLUS have their shareholders (which includes the EPF) to answer to. So, opting PLUS to take a huge hair-cut is likely to be out of the question.

And Malaysian Insider reports:-

Toll highway operator PLUS Expressways Bhd could be compensated as much as RM5 billion over the next five years for not raising toll rates. The highway concessionaire is also owed about RM2.5 billion from previous compensation as at June 30.

Toll compensation to PLUS amounted to RM655 million, RM698 million and RM731 million for 2006, 2007 and 2008 respectively. PLUS has 30 more years before the concession expires. Without even taking into consideration the direct toll collection from motorists, the government’s compensation amount over the next 30 years would exceed RM68 billion should the current toll rates be maintained. This is after taking into account the fact that PLUS is entitled to increase toll tariffs by 10% every three years.

Compensating the highway operators for not increasing their toll is not something new. Compensation (also known as subsidies to some) amounting to millions have been paid whenever the Government have requested the highway operators to maintain the current toll rate. It has been so since the days when Samy Vellu was heading the Works Ministry. PLUS for instance, was reported to have received compensation for almost 850 million for last year alone

For those who are using the highway, freezing the increase of the toll rates may sound like a welcome measure but look again, where the Government is getting the money to compensate the highway operators. Ultimately, it is going to be the rakyat who is going to pay for these compensations. At the end, the net effect of freezing the toll rates ends up meaning nothing.

(Either you get the rakyat to pay the increased toll rates or get the rakyat to pay for the compensation. Either way, the rakyat is screwed. Image source: http://thestar.com.my)

And compensation paid by the Government does not go into the development of the country but rather it goes to enriching the already cash rich business entities. Unlike petrol subsides, there is no external or global factor or limited supply that causes the increase of the toll rates (hence requiring heavy compensations to maintain the rates artificially low). And still remember the warning by the Minister in the Prime Minister’s Department Datuk Seri Idris Jala on compensations?

Let us recap…

Malaysia will be bankrupt by 2019 if it does not cut subsidies and rein in borrowings, said Minister in the Prime Minister’s Department Datuk Seri Idris Jala on Thursday.

Idris Jala even proposed that the “toll rates to increase in mid-2010 as per concession agreement except for highways without alternative toll-free routes”. So, why Najib is going on the wrong side of the road? It is obvious that that when the rates are not increased, it is only mean compensation to be made in its place.

To make things worse, the compensation to the highway operators is going to come from those who are not using the highway in the first place. Not many of us uses PLUS highway on daily basis (how many out of the 28.2 million Malaysians?) but if the Government is going to compensate PLUS for the frozen toll rates, one can be assured that their tax money is going to work hard (direct or indirect ) to compensate these highway operators. Is it fair? The one who is using the PLUS highway is enjoying the old toll rate, courtesy of a populist, short-sighted budget but the one who is not using PLUS highway is “paying” for the compensation that runs in billions.

Telling the rakyat that the toll will not be increased for x number of years without a viable proposal on the highway agreement and no means to reduce these painful compensations is anything but empty talk. Not when the money is coming from the right pocket to the left pocket. There is no real saving to the tax payers – it would have been fairer to get those who are using the highway to pay for the usage instead of spreading it to the rest in name of compensation. That way, we can see the money paid to the correct usages – road users’ money to usage of the highway and the Government’s “money” to development of the country (something that Idris Jala pointed earlier).

New Highways, Old Problems?

Then we have this rather disturbing news:-

The Najib administration should explain the tender awards process of four new tolled highways, amid reports of them being directly awarded, DAP MP Tony Pua said today.

We are not complaining on the new highways – after all, highways helps in development and somehow provide relief to traffic jams. So we were meant to believe whenever the Government talk about awarding new highways (just wish the bastards who signed off on behalf of the people for the bloody highway that cuts through Puchong are out there, stuck in traffic jam, with a full bladder, wasting their time and fuel after paying the insane toll charges with their hard earned money). Nah, we don’t mind the new highways but how it is awarded and how it is shrouded in secrecy is what we have a problem with.

The Government says that the highway agreements are subject to Official Secrecy Act but we don’t have a clue why it is deemed secret. Certainly, agreements made by the Government with any business entities will not go to the extent to cause suffering and multiple losses to the people. Certainly methods of calculation of the toll rates will not jeopardize the national security of the country.

In fact, if the agreement is made public, perhaps the road users who are paying the insane toll rates may able to understand as to why the cash rich highway operators increase the toll rates of the already heavily jammed highway (which by the way, built on existing trunk road) to RM0.60 at one go and wanting to increase even more. But no, the Government fought tooth and nail to maintain the agreement secret (is it because they worry the agreement may be challenged in a court of law?).

Now we are hearing that the new 4 highways were directly awarded. How we know that whoever drafting the agreement and working out the formula for toll rate increase have not made the same mistakes that the idiots in the past have done? Has the proper toll reduction mechanism been built this time around? Is there going to be periodic review of the agreement? Is the highway agreement really water-tight and in favor of the people and the country and not helping a profit driven business entity to make even more money?

No Viable Alternatives?

And what happened to the proposed buy back the highway concessionaires that sounded more cost effective than the yearly compensations that the Government keeps paying from public funds?

In 2009, Nutgraph reported:-

The DAP has suggested that the government buy back all shares of PLUS Expressways Bhd that it does not already own, and take over its existing asset-backed liabilities for the approximate amount of RM15 billion. This amount and more would be recovered from motorists using the North-South Highway by maintaining the existing toll rates for six years. Should PLUS be acquired this year, by 2016, toll collection would no longer be required on PLUS-owned highways

Tony Pua of DAP made interesting points on the buy back of the highway concessionaires but nothing concrete has been put in place in this aspect (was it because it came from the opposition and not from the ruling party?)

This is why we are suspicious of the Government when it comes to toll rates for the highway. We are even more suspicious when the Government is saying that there will not be any increase in toll rate for the next 5 years. We are suspicious because what is being said is far from reality.

And just when we thought we have seen the worse, came along Warisan Merdeka…

“We spend a lot of money here and we should be allowed to fill up with whichever type of petrol we want,” he added.

Ya, you spend a lot of money in JB but you still get a lot of things cheaper (namely foodstuff and sundry items) than in Singapore. That does not mean we need to give you our money too. In other words, just because there is a chance, you want a free screw too?

Another Singaporean, property agent Eric Tan, 43, said the lower price of fuel was the only attraction that led to many Singaporeans coming to the state.

“I believe sales of products in Johor Baru will go down once the ruling is enforced,” he said, adding that the move was bad for Malaysia’s tourism.

Sale may go down – it often do whenever prices goes up but once everyone is used to the new price scale, sale should pick again. The fact that the Sing Dollar is still stronger than the Ringgit and our Government is unlikely to increase prices of goods that drastically so soon (to ensure their own survival, of course); Singaporeans will still find items in Malaysia cheap enough to cross over the Causeway.

Art, photography and design executive Alex Soh, 37, also felt that many Singaporeans would not come to Johor if the price of petrol was increased.

“Cheaper petrol is one of the major attractions,” he added.

Well, Singaporeans have a choice, don’t they? They can always buy petrol at the petrol stations in Singapore and save us the trouble. Other than cheap petrol, Malaysia has many other things that is attractive to foreigners – because I don’t recall “cheap petrol” in Tourism Board’s Visit Malaysia advertisements (if you get my drift).

Derrick Cheng, 53, said many Singaporeans were unclear about the issue.

“I heard people saying that the price of petrol would go up while others say that we (Singaporeans) can still buy the lower grade of petrol but are only allowed to purchase 20 litres,” he said.

“It is unfair to charge separate rates for foreigners because it doesn’t comply with the free trade system that is supposed to be practised by the Malaysian Government,” he added.

Another idiot who just did not get the underlining message – there is separates rates because the petrol in Malaysia are not sold at actual market price (just be patient, we will get to that level eventually). Petrol in Malaysia is highly subsidised with Malaysian tax-payers’ money. It is not like Malaysians are paying for the petrol at market price now and we decided to increase it above the market price for foreigners at our whims and fancy.

Salesman Ken Tan, 28, said there were traffic jams at the Causeway and because of that, many Singaporeans expected cheaper petrol when they return to their country.

Perhaps with less Singaporeans coming over to JB (as predicted by one Alex Soh), traffic may be less at the Causeway.

If you ask me, I don’t see the problem – why should we, Malaysian tax-payers should be subsidising Singaporeans with cheaper petrol? It is not that we have banned sale of petrol to foreigners – Singaporeans can still get petrol in Malaysia but at un-subsidised rate.

Further the price of RON97 in Malaysia is still cheaper than the same RON97 sold in Singapore – almost 57% cheaper! And I doubt that for that price difference, Singaporeans still want to go for RON95 unless you are dirt cheap.

Please lah – don’t tell me that all these years, the development and welfare program for women have never taken off without a building? Don’t we have a Ministry and well-fed, back door Minister for that? You need a building before you can do anything ah? We have many under-utilised Government buildings that can be used for the same purpose. What about those under the local authorities?

No need to waste RM18.7 million x 17 states (including 3 FTs) = RM320 million to have one “bullshit” in every state. Before you can say “the fat lady says”, the RM320 million “construction” costs will balloon up and we would have another “palace like mess“. At the end, the taxpayers would be footing the bill and those who proposed these white elephants would have wash their hands off.

Instead, focus on more serious issues that are facing women in Malaysia like this one. Don’t syiok sendiri with just having fancy buildings and having good image on the media.

Enough of wastages! Not when people are already not happy with the calls of reducing the subsidies and on the other side, politicians (including some fat wife of someone) happily wanting to burn off taxpayers’ money like their own.

P.s. Every state includes states under PR? Just asking since everyone knows about the double standard at Federal level when it comes to PR led states.

(Sight of things to come but we wonder where the framework for proper management of public funds is? We want to see evidence of proper controls and enforcement to go hand to hand with reduction of subsidies. Otherwise, we will be back on square one – the corrupt & rich making money at the expense of the poor. Image source: The Malaysia Insider)

Another sneaky increase from BN led Government but this is something we already anticipated since the day the Government opened its mouth on subsidies and the country going bankrupt.

Sugar is now 25 sen more per kilo (new price is RM1.70 sen per kg) while RON 95 petrol and diesel is up by 5 sen per litre (new price for RON 95 is now RM1.85 per litre and diesel is RM1.75 per litre).

Liqued petroleum gas (LPG) is also up by 10 sen. The new price is RM1.85 per kg.

And of course, to ‘sweeten’ the price hike, we get this over-used, over-killed, over-abused statement:-

He added that fuel and sugar prices were still the lowest in the region.

I am all out for reduction of subsidies – it is the right to do – let everyone pay the actual amount. But then again, it does not mean the Government (or rather corrupt politicians and civil servants) can pocket the money saved from subsidies into their own pockets. RM750 million is expected to be saved from this latest price hike but how much of it will be given back to the public?

Any attempt to divert the money saved from subsidies back to the public would also mean we need to plug the leakages that we been having in the system. Have we done that? Are we still looking at corruption, mismanagement of public funds, mismanagement of economy and wrongful allocation of public funds for personal gains?

At the speed we are doing things and the failure to go against those who have misused public funds in the past, it is likely we will still be with multiple leakages for now and in near future. This is why there have been voices of oppositions to the price hikes. It never been on the issue of why we need to reduce the subsidies but rather what we have done with the subsidies saved.

Anwar Ibrahim of Pakatan Rakyat was quoted:-

Datuk Seri Anwar Ibrahim today criticised the Najib administration’s rationale for the latest subsidy cuts, pointing out that the savings of RM750 million was a pittance compared to the billions spent for other “careless” expenditures.

The Pakatan Rakyat de facto leader accused the Barisan Nasional (BN) government of spending billions to bail out troubled government-linked companies and to foot exorbitant bills from foreign consultancies employed to help improve the prime minister’s international image

The question to the government is, given the financial constraints that the government is facing, why isn’t the government targeting the fat cats which are lynching off the tax-payers’ hard-earned monies first, before attacking the livelihood of ordinary Malaysians? (note: he missed another fat cat – the highway robbers toll concessionaires)

Whilst we are concerned with the reduction of subsidies for the people, we get to hear disturbing news like this:-

Anwar, who is also the Parliamentary opposition leader, further pointed out that just yesterday, the House was informed that the PM’s Department’s operational expenditure had reached over RM3.8 billion last year and had been allocated a budget of RM3.9 billion for this year.

“This includes expenses for secretariats for former prime ministers and for Permata, which is handled by the prime minister’s wife,” he said, referring to Datuk Seri Najib Razak’s wife, Datin Seri Rosmah Mansor.

We have yet to get a proper answer for the almost RM1 million advertisement for some politician’s wife and here we have another increase to the Government’s expenses – courtesy of cut down of public subsidies? Where is the “change your lifestyle” at the Government’s end?

And another laughable matter that was reported along with the price hike is the impact on other consumer goods. It is no secret that a price hike in fuel and basic consumer goods is usually taken advantage by certain quarters to increase the price of their goods (and services) substantially. It is time to make the “killing” whenever the price of basic items goes up.

It is understandable if they want to pass on the increase of raw materials to the end consumers but the margin of increase should be reasonable. Instead we have people who not only pass the increase in raw material price to the consumers at many times fold but decides to make substantial profit at the same time. And you need not look far – just hop over and check what the latest price of roti canai and teh tarik (it can be anything from nasi lemak, thosai, wanton mee, etc) is. Does the Government have enough resources (sigh, more expenses to the Government) to make spot checks and enforce the right price?

Tony Pua of Pakatan Rakyat asked the same:-

It is hence shocking to hear the Prime Minister, Datuk Seri Najib Abdul Razak, supported by the Performance & Management Delivery Unit (Pemandu) claim in their subsidy rationalisation fact sheet that the price increases will have “minimal impact” on households in Malaysia.

In the fact sheet, it’s “demonstrated” that the new teh tarik price taking into the impact of subsidy reduction of fuel and upward price adjustment would be around RM1.0155, or an increase of less than 2 sen.

The impact on other popular items such as roti canai was stated as being 0.24 sen per piece, 0.6 sen for rice, 6.3 sen for meat per kg and 1.05 sen for mee goreng.

Pemandu under the chairmanship of the Minister in Prime Minister’s Department Senator Tan Sri Koh Tsu Koon must be living in a parallel universe for having the audacity to publish such numbers which are at best applicable only in a fictitious and theoretical universe, and at worse, showing the complete lack of understanding of real world market dynamics on the price of goods and services.

I challenge Tan Sri Koh Tsu Koon to find me a mamak stall in Malaysia which will increase the price of teh tarik by a mere 1.55 sen or the price of roti canai by a minute 0.24 sen in the entire country to prove the “minimal impact” of the latest round of 5-in-1 price increase.

Tony Pua (short of calling Koh Tsu Koon an idiot) has a valid point here – just how the Government is going to control the subsequent price increases on other consumer goods which is not under controlled items? The Government can ask the consumers to lodge complaint of the substantial increase but what the Government can really do against the business?

The fact that these items (roti canai, teh tarik, etc) are not controlled items (and it should not be) means the business is free to increase the price as they see fit (read in between the lines here). If consumers do not agree with price hike of these items, they have an option to look elsewhere. That is how the market works.

The problem starts when everyone else starts to increase their goods and services prices and the Government will not be able to do anything.

Not with the current disposable income. And here is where the Government can come in because it will be very difficult to get the private sectors (who is governed by net profit at end of the day) to simply increase their employees’ salary and when it comes to public sector, the Government is the employer and can determine how it can structure the salary scale for the public servants.

The Government can also curtail the leakages and ensure the money saved goes back to the public – by means of reduction of income tax (reduced tax due to Government’s expenses is now less), reduction of subsidies paid to IPPs and toll concessionaires (revise what the public need to pay these profit making entities), improve on the delivery system to reduce wastage of time and resources and make annual allowances to those earning below the minimum wages (those who do not earn enough to be taxed but still faced with the substantial price hike).

Certainly, the above list is not exhaustive because what we are seeing is nothing but works of economics in motion i.e. income = expenses. If you faced with a very high expenses (due to wastage, corruption and blatant profiteering) and very limited source of income (now that we have dwindling petrol reserves), there is very little choice but to relook at your spending – can you reduce the net expenses or can you increase the net income or both?

At the moment, the Government is looking at reducing the expenses by shredding off the subsidies paid on behalf of the people but is it really the right option? Shouldn’t reduction of wastages, arrest of corruption and blatant profiteering be top of the list for reduction of expenses?

The Government need not look far on this – they already worked this out in NEM but that model somehow went missing after some quarters made some noise. That is why reduction of subsidies (despite its merits) is dead wrong and highly questionable.

(The current palace is already looking majestic and we have already spent millions on it but we went ahead to construct a new palace. We end up looking like dungus but what the heck, we been in that situation before. The new palace looks good on paper but the volume of abuse and mismanagement of funds to build it makes the whole affair end up looking too ugly. Image source: Tok Ey Ai)

….there is the matter of the cost of building a new national palace for the country’s sultans, which has doubled from RM400 million (US$124.2 million) to RM811 million since the contract was let – without bid — in 2006 under the premiership of Abdullah Ahmad Badawi, and may well triple, according to government insiders.

Many foreign workers hired to build the RM800mil Istana Negara claim that they have not received three months’ wages from some project sub-contractors. There are over 1,000 migrant workers hired by 130 sub-contractors working at the project site.

By using migrant workers, the contractors already maximising their profit margin. So, who been pocketing the money meant for the workers? But the increased cost of construction of the new palace was not a big surprise – especially in Malaysia. Certainly in time, the shit will hit the (palace’s) fan and the responsible people are going to wash their hands – just wait and see.

We have a very bad record of management of public funds – there are plenty leakages that is yet to be plugged by the government of the day. We already heard of paying above the market price for military hardware just because someone decided to make huge sum of money through “commissions” (in lay person term – bribery). Another example is PKFZ – that mess is yet to be entangled and it is likely that the public is going to made to pay for that mess (whilst the greedy ones escape with millions in their bank).

Anyway, that is not what disturbs me because unless we kick the Government of day into the wilderness, mismanagement of public funds is just going to continue (just look at the “rape” in Sarawak).

What disturbs me is this:-

“Syed Mokhtar got the original contract at RM400 million. Then the Raja of Perlis was given a gratuity and his brother, Syed Anwar Jamallulail, became Syed Mokhtar’s 30 percent partner and costs escalated,” said a source. “When the current king came in – the Sultan of Terengganu — he asked for a piece of the action and costs went up again.

It was brought up in cabinet in December by an MCA minister. [Mohamed Nazri Abdul Aziz, minister in the prime minister’s department for parliamentary affairs] replied: “So what? It’s the house of a Malay King, not a Chinese contractor.” Needless to say, no one has brought it up since.”

First disturbing part – that our royalties been “accused” as being the factor for the increase of the construction cost. Are we going to keep quiet on this? If it is not true, then what we are doing to clear our names? But if it is true, then the question – are we going to investigate further?

Second disturbing part – If it is true, what Nazri is trying to say? That corruption and blatant increase of cost is acceptable just because the construction is being done for a Malay King? Isn’t that an insult to the King and Malaysians as whole? Nazri missed the whole point! It is nothing to do with constructing a new palace for the King, but the underlying reasons for the increase of the construction cost.

As I was just saying, in Sweden, recent royal wedding caused a massive public revolt over public footing half the bill (10 million kronor or RM4.25 million ringgit) while M’sians are constantly being FLEECED left right and centre for this palace, that palace and god knows what else.

Don’t get me wrong. I’m not against the institution, Raja-Raja Melayu and the rotating Agong BUT dead set against the blatant stealing that takes place. Already, cost overrun on this latest palace in Jln Duta and mind you all, the palace hasn’t been completed so we can’t ascertain the total ‘damage’ just yet but it would be more than current and revise estimate – that I’m sure.

If the escalation of cost was due to increase of cost of raw materials or major changes to the layout of the palace (perhaps new security and facilities) – we would have been more than happy to foot the bill. After all, Yang di-Pertuan Agong is the head of state and deserves the rightful respect and honour. And we would have been proud of the new palace.

But what is not acceptable is that the escalation of cost was due to someone wanted to make money for no valid reasons. Why should the taxpayers foot the extra money so that someone could go laughing all the way to the bank? Who are these people and what they done for the taxpayers? In developed countries, such act is known by many names – “daylight robbery”, “stealing”, “corruption”, “fraud”, “breach of trust”, etc. But in Malaysia, it is known simply as “escalation of construction cost”.

If this continues, forget about Malaysia being a developed country in the near future. Najib says 2020 but with wastages and mismanagement of public funds still riding high and fast, “developed by 2020” deadline is going to be a one steep hill to climb.